James Jensen: Welcome to everyone. I'm James Jensen, today's webinar chair. I'm a contractor supporting the office of Indian Energy Policy and Programs Tribal Webinar Series. Today's webinar, titled Unique Aspects of Energy Development on Tribal Lands: Land Leases, Service Line, and Right-of-Way Agreements on Tribal Lands, is the fifth webinar of the 2019 DOE Tribal Energy Webinar series. Let's go over some event details.
Today's webinar is being recorded and will be made available on DOE's Office of Indian Energy Policy and Programs website in about one week. Copies of today's Power Point presentations will be posted to the web shortly after this webinar. In actuality, I think we already have a couple of the presentations posted and a link has been sent out. The final presentation will not be posted until later today. Because we are recording this webinar, all phones have been muted.
We will be answering your written questions at the end of the final presentation. You can submit a question at any time by clicking on the "Question" button located in the webinar control box on your screen and type in your question. Let's get started with opening remarks from Lizana Pierce. Ms. Pierce is a senior engineer and deployment supervisor in the Office of Indian Energy Policy and Programs. She's duty stationed in Golden, Colorado.
Lizana is responsible for managing technical assistance and education and outreach activities on behalf of the office, implementing national funding opportunities and administering the result in Tribal Energy Project grants and agreements. She has 25 years of experience in project development and management and has been assisting tribes in developing their energy resources for nearly 20 years. She holds a bachelor's of science degree in mechanical engineering from Colorado State University and pursued a master's in business administration through the University of Northern Colorado. Lizana, the virtual floor is yours.
Lizana Pierce: Thank you, James, and hello, everyone. I join with James in welcoming you to the fifth webinar of the 2019 series. This webinar series is sponsored by the Office of Indian Energy Policy and Programs, otherwise referred to as the Office of Indian Energy for short. The Office of Indian Energy directs, fosters, coordinates, and implements, energy planning, education, management, and programs, that assist tribes with energy development, capacity building, energy infrastructure, energy costs, and electrification on Indian lands and homes. To provides this assistance, our deployment program works within the Department of Energy across government agencies and with Indian tribes and organizations to help those tribes in Alaska native villages overcome the barriers to energy development.
Our deployment program is composed of a three-prong approach consisting of financial assistance, technical assistance, and education and capacity building. And this webinar series is just one example of our education and capacity building efforts. The series is a part of the Office of Indian Energy's efforts to support fiscally responsible energy business and economic development decision making and information sharing amongst tribes. It is intended to provide attendees with information on tools and resources to develop and implement tribal energy plans, programs, and projects, to highlight tribal energy case studies, and identify business strategies tribes can use to expand their energy options and develop sustainable local economies. On today's webinar, as described in the title, we want to focus on the unique aspects of energy development on tribal lands.
Land leases and right-of-way agreements are examples of arrangements that will affect how projects are developed, and this webinar will explore these arrangements with the goal of giving attendees a greater understanding of not only their importance in the development process, but how they work, including how these agreements can serve as valuable tools for tribes looking to leverage their land ownership for energy and economic development. We hope this webinar and the webinar series is useful to you. We also welcome your feedback. So, please, let us know if there are any ways that we can make the series better. And with that, I'm gonna turn the floor back over to James. Thank you.
James Jensen: Thank you, Lizana. On today's agenda, we have two presentations.
I will introduce both of those presenters now. For our first presentation, we will hear from Dan Gargan. Dan is an enrolled member of the Rosebud Sioux Tribe where he is president of the Rosebud Sioux tribal utility commission. He was a member of the tribal negotiating team, negotiating rights-of-way for Western area power administration's transmission lines crossing the reservation. Dan is also a board member of Oceti Sakowin Power Authority, representing the Rosebud Sioux Tribe in the development of commercial scale inter-tribal wind farms.
Outside of the energy space, Dan has served in many other roles, including as a hearing officer on the tribal elections board and vice president of the tribal tax commission. Following Dan, we will hear from Breann Nu'uhiwa. Breann serves as senior associate general counsel to the Pechanga Band of Luiseño Indians in Temecula, California, where she provides strategic legal advice and counsel to Pechanga's government departments and business enterprise. Breann co-led Pechanga's initiative to form Pechanga Western Electric, the first tribally owned and operated wholesale electric utility in the state of California, and she continues to work closely with the utility's leadership team on legal and regulatory matters.
Prior to joining Pechanga, Breann served as assistant general counsel to the Salt River Pima-Maricopa Indian Community in Scottsdale, Arizona, and chief advocate of the Office of Hawaiian Affairs in Honolulu, Hawaii. Breann began her legal career as a litigator with Steel and Reed, and _____, and she has also litigated with Reed Smith, LLP, before turning to government service in 2015. Breann has a bachelor's degree from Yale University, a Juris Doctor from the University of Southern California, and a master of laws and tribal policy law and government from Arizona State University. I want to thank Breann for agreeing to include in her presentation information on BIA wind and solar land lease approvals. Thank you, again, Breann. We really appreciate that addition.
With that, let's get started with our first presentation. Dan, please proceed once your slides are up.
Dan Gargan: Good morning. This is Dan Gargan. I'm a member of the Rosebud Sioux Tribe. I've been on the tribal utility commission – the regulatory body – for our reservation. It's basically the equivalent of a public utility commission. I've been on the commission since 2012. Next slide, please.
I'm going to start off with a little bit of history because I think it's very unique in the approach that we have to take as Indian people that are governing on our reservations. The Indian Reorganization Act was passed in June of 1934, formerly called the Wheeler-Howard Act. It was enacted by Congress, aimed at decreasing federal control over American Indian affairs and increasing Indian self-government and responsibility. Next slide.
The Rosebud Sioux Tribe, interestingly enough, passed their constitution and bylaws on the same date that the act was empowered. Most tribes – or many tribes, actually – had templates that were provided by the Bureau of Indian Affairs as guidance to drafting their own constitution and bylaws. So, that's why many of them were ready to be published and enacted and adopted on the day that the actual IRA was adopted. Next slide.
In May of 1936, US Congress passed the Rural Electrification Act. It provided federal loans for the installation of electrical distribution systems to serve isolated rural areas of the United States – specifically, also, with regard to Indian reservations. The funding was channeled through cooperative electric power companies, most of which still exist today. Next slide.
For the Rosebud reservation, almost all of our electricity has been provided through these rural electric cooperatives. Rosebud Electric was formed in 1945; Lacreek Electric – which serves the Western bound order of the reservation – was formed in 1948; and Cherry Todd Electric – which serves the majority of tribal members on the reservation – was formed in 1949. Next slide.
You can see on this map of South Dakota electric co-op service territories. At the bottom central part of the map – Lacreek Electric, Cherry Todd, and Rosebud Electric. The majority of the reservation is, today, Todd County with some of the reservation being in Millet County just to the North of us, and then, the Western edge of the reservation is served by Lacreek Electric. Because of a lawsuit in the early '70s titled Rosebud v. KNEIP, most of the service area for Rosebud Electric – our tribal members – are isolated communities like Hamlin and Ideal and the small service are in Winner and Bonesteel. I would like to point out that by the late 1940s, when these elected co-ops were formed, there had been no jurisdictional cases before the US Supreme Court – that would actually define tribal jurisdiction – over utility companies.
The one big case that came through that really helped define and put parameters around jurisdictional issues was the Montana BUS case, but that didn't come about till 1981. Next slide.
So, in 1992, the Rosebud Sioux Tribe adopted a utility regulation code under Resolution 92-13. It was passed and adopted February 14, 1992, and it amended the Rosebud Sioux Tribe Law and Order Code Title 20 entitled "Utilities". This code really defines the regulation and the authority and jurisdiction of the Tribe over any utility operating within the boundaries of the Rosebud Indian Reservation. Next slide.
The mission of the Tribal Utility Commission is to protect and representing rate payers in the provision of safe and reliable utility service at the lowest possible cost, and to ensure that utility customers have access to the best possible information about their options and choices. Like a stayed public utility commission, electric and telephone utility companies are required to present proposed rate changes to the utility commission for a review with sufficient time that we can analyze and make our findings known, and also, whether or not we would allow the new rates to go into effect. The general jurisdiction of the commission extends to and includes telecommunications companies engaged in furnishing of telecommunication services; telegraph and telephone companies engaged in the transmission or messages or conversations by voice or electronic means; pipelines and utilities engaged in the generation and distribution of light or power; gas utilities engaged in the distribution of natural synthetic or artificial gas; water companies for the storage and distribution of water for domestic or other beneficial use; heating utilities engaged in the distribution of heat; and all other utilities that operate, maintain, or control any equipment or facilities within the reservation.
Each year, the utility commission has what we've termed a "utility forum" when all of the utility companies come together in our tribal council chambers and present their previous year operations, financial standing, future expansion and construction, to the general public, which is broadcast under our Rosebud Sioux tribal channel 93 that's broadcast over YouTube – also, simulcast over our local tribal radio station. And it's really an opportunity to have question and answer periods for these utility companies by tribal members and other non-Indians living on the reservation as to what plans are going to be in the upcoming years. Next slide.
Title 20 – the utility section of the Law and Order code – had a specific provision – Section 20-6-102 – entitled Utility to Furnish Information of Reservation Easements. Within 180 days of the effective date of this title, each electric utility providing service on the reservation shall provide to the commission information justifying any easements it exercises on the reservation. The problem is that the title was adopted in 1992 but the commission office was actually not formed until late 1994 in – at such time that the council appointed commissioners and hired a staff to oversee the enforcement of Title 20. Next slide.
So, what that does is it raises a question. If the utility companies had been Johnny on the spot with the adoption of Title 20 in 1992, they would have turned over – or tried to turn over – information regarding their easements and rights-of-ways, but there was nobody. There was no commission office at that time to actually accept them. They could have turned them over to the secretary of the Tribe – Tribal president, Tribal attorney. Unfortunately, there was no effort made by any of the utilities on the reservation at that time.
So, the question is – could there be poles and wires on the res without a valid right-of-way agreement? Absolutely. Not only there could be, but more than likely, the majority of the poles and lines on the reservation do not have a right-of-way or an easement. Given the recent history – being the first half of the 20th century of the reservations – an electric and telephone utility company – the mandate by REA – the Rural Electrification Act – was to _____ as quickly and efficiently as possible to get electricity to these rural communities. So, the rural electrical co-ops did just that.
They went out. They put in poles. They strung the wires and they got electricity to the homes and farms and businesses in these sometimes extremely rural areas. There was not much thought given as to jurisdiction or trespass or the authority of any other entity; just the granting of that authority by the REA. Given the early history of these utilities, that was their goal, and we have to keep that in mind. Next slide.
I've listed some guidelines of things that you can do since if you were working on rights-of-ways or easements on an Indian reservation, you will absolutely run into. For new or possibly non-existent right-of-way agreements, the first thing you should do is request copies of the agreements or contracts from the utility company. Always a good place to start is to do it in a friendly manner, to try and work with these utility companies. Many of them have been supplying telephone service and electricity to your communities for many, many years. Second – request copies of agreements or contracts from the US Department of Interior Bureau of Indian Affairs.
Most larger tribes and reservations have a reservation agency that will have a realty office that may have many of these agreements, if they exist. The other thing that you can do if you don't have an agency or if you share an agency office, is you can go to a regional title plan such as Portland or Aberdeen, South Dakota, where they actually keep copies – sometimes originals, but more often than not, they keep copies of any agreements that have been signed for the tribal land. You can research tribal land office documents and maps and maps are gonna be really critical, because they are gonna be the way that you define which tracks of land that these right-of-way or easements will cross to be able to do further research. And then, finally, you need to review a title status report for each parcel of land that will be affected by the new or non-existent right-of-way or easement. TSR is a report issued after a title examination which shows the properly _____ discussion of attractive Indian land, its current ownership – including any applicable conditions, exceptions, restrictions, or encumbrances on record, and whether the land is in unrestricted, restricted, or trust status.
Once you have developed a map and you know the direction and the land that the proposal encumbers, then, you need to put together the appropriate TSRs so that you can look at the ownership and the status of the land all along the line that's being proposed. Next slide.
I do want to point out that it is a responsibility of the tribe to pursue these rights-of-ways. The utility companies will not come forward to offer maps or information. So, whether you have a regulatory authority, or you have administrative rules or regulations, it is the tribe's responsibility to pursue the legal nature of these contracts. Reservation Trust Land Rights-of-Way Partner Agencies – these are organizations that can assist. Sometimes, they're absolutely required.
US Department of the Interior, BIA Realty Office is always a wealth of information and should always be kept in the loop for any of the work that you're doing on rights-of-ways and easements. Tribal Land Offices – at Rosebud, the Sicangu Oyate Land Office and the Tribal Land Enterprises that manages a majority of the land on the reservation – all of the – or a lot of the mapping, the shape files, the land descriptions at Rosebud are kept by the SOLO or the Sicangu Oyate Land Office. So, to be able to go in and speak with them about a proposed right-of-way or your concern that there's a line crossing the reservation that does not have the right-of-way – they would be able to assist in looking at that as a first flash. The Tribal Historic Preservation Office is absolute requirement that you keep them in the loop. THPO is the watchdog for all the national federal legislation such as NGPA – the Native Greatest Protection Act.
Pretty much, with any reservation, before you put a shovel in the ground, you need to be talking to the THPO office. Before any ground is broken, they will need to do cultural archeological surveys to make sure that you're not going through a sensitive area – an old grave site – and you need to have their – absolutely have to have their approval before any ground is broken. Tribal Utility Commissions – such as Rosebud or the Regulatory Authority – at Rosebud, we're actually responsible for the rights-of-ways and enforcement. On the legal side, a tribal attorney general's office – or sometimes, tribes hire trust land specialists – to be able to assist with rights-of-ways. Next slide.
And just when we thought we had the process down, the feds changed the rules. In 2016, the US Department of the Interior, after consultation with tribes, published a change to the right-of-way approval rules contained in 25 CFR section 169. And if you have not already read the new rules, I would encourage everybody to go out and find those. They are online in a PDF file. It is about 229 pages long.
So, you can put that in your library, but you do need to be aware, because the changes were quite significant. You have to remember that all Indian reservation land is either fee or trust in its legal ownership. Fee land is that which is in private ownership; trust land is held by the United States government for the benefit of federally recognized Indian tribes and individual citizens of those tribes. The US Department of the Interior has, in the past, had the sole responsibility for approving all rights-of-way on a trust land. With the changes to 25 CFR 169, that started to evolve. Next slide.
Highlights of this final rule include – number one, they were simplifying the requirements by relying on general statutory authority to grant rights-of-way and eliminating outdated requirements that apply to specific rights-of-way. Second – clarifying processes for BIA review of rights-of-way documents, streamlining the process for obtaining a right-of-way on Indian land by eliminating the need to obtain BIA consent for surveying in preparation for applying for a right-of-way; establishing timelines of BIA review of rights-of-way requests. Number four – adding certainty to applicants by allowing BIA disapproval only where there is a stated compelling reason. Next slide.
The trustee role of the federal government with this 169 rule changes was evolving. It's providing Indian landowners with notice of actions affecting their land. In the past, the Bureau of Indian Affairs, many times, did not have any legal notice requirement. They were able to manage the tribal lands – trust lands – for the benefit of Indian people, but that meant they could sign agreements for mining, they could sign agreements for sales of timber, pretty much without the approval of the tribe or the tribal member. Second – deferring to individual landowner decisions subject to an analysis of whether decision is in their best interest.
Third – promoting tribal self-determination and self-governance by providing greater deference to tribes on decisions affecting tribal land; clarifying tribal jurisdiction over land subject to a right-of-way; and incorporating tribal land policies and processing a request for a right-of-way; and to allow Indian landowners as much flexibility and control as possible over rights-of-way on their land. Many tribes – Rosebud included – have developed policies and procedures for their applications for a right-of-way or easement, and within those policies and procedures, there's specific things that a person has to do or a company has to do to apply and get approval of the right-of-way. For example, what I had mentioned with the tribal historic preservation office – that they have to absolutely have authority to sign off on the new right-of-way – that it's not going to infringe on the tribal people's culturally. They're not gonna be digging through a grave site or an old camp site, and that they allow that flexibility to provide that input in the final sign-off of the agreement. Next slide.
When you're negotiating the term of a lease of a right-of-way, there's some things that you want to keep in the back of your mind – and we ran into this in our negotiations with Western area power and other groups. The first one is – the lessee – the person that wants the lease – may try and negotiate a perpetual lease agreement or claim they have a perpetual lease agreement. These agreements are out there. Depending on the time frame that they were signed and enacted, they may or may not be legal. The CFRs have changed over time, sometimes allowing for perpetual leases; sometimes, they weren't.
Recently, they've cut down on the length of time that a lease can run without renewal. On an existing agreement, review the date of the agreement and compare it with the appropriate sections of 25 CFR. You may have to go back historically to some archives and see which section of the legislative history and that part of the CFR was actually enacted at the time that the agreement was signed. Statutory limitations on the length of these agreements have changed over time. Rules contained within 25 CFR limit the length of new agreements and all new agreements will be governed by 25 CFR 169 right-of-way rules last amended in 2016.
The lessor, the tribe, or the individual tribal member, will need to review these requirements of the new rules – specifically notice requirements and rights of landowners. Next slide.
The next thing that you have to really give some thought to is what is the value of the right-of-way? There are some organizations, people, businesses that may want it free of charge, but it is the right of the landowner or the tribe to charge for coming across the reservation and across their land. The age-old valuation method used by the Bureau of Indian Affairs was an appraisal of the land based on its use prior to the right-of-way. So, if the right-of-way is across trust grazing land, the value of the right-of-way would be based on the per-acre value of the grazing land, as determined by historic BIA land leases. This valuation will be the lowest of all methodologies and will be heavily favored by the lessee.
They will make claims that this has been used by the bureau since time and memorial and it should always be used, but it is going to be the lowest return for the tribe or the individual landowner. A newer valuation model is based on comparable trust lease agreements, similar to reviewing sales of comparable properties for residential real estate. If you go to buy a house in a neighborhood, your realtor may pull some comps to look at how much the homes in that neighborhoods were selling for to arrive at what would be an equitable sales price or purchase price for that home. The lessee will argue that this model is not representative of the land they are leasing for the right-of-way. The differences may be geographic location of the right-of-way.
For example, many of these new comparable lease agreements have been reviewed – have been in New Mexico, and how would that apply to a lease agreement that was being negotiated in South Dakota? A third valuation model that should be investigated is the value of the right-of-way based on the value of the power line or the property that's moving through that right-of-way. For example, what is the annual value of the kilowatt hours transmitted by the power line? Now, many utility companies may be reluctant or hesitant to give you that information, but you can require it under the negotiation. It is your right-of-way and you have the responsibility to negotiate that to the best benefit of all partners. Next slide.
Some final considerations. You may want to consider the party signing a non-disclosure agreement during the pendency of the negotiations. Otherwise, you may find third parties attempting to influence the negotiations. When we first started negotiating with one large utility company, we started getting messages and phone calls from another utility company saying, "Do you know if you actually press this cost for this right-of-way that your power rates are going to go up, et cetera, et cetera?" Non-disclosure agreement will keep everything confidential until the conclusion of that negotiation, and it's very helpful to have that in place.
All parties at all times should be negotiating in good faith. It sounds common sense, but from experience, not all parties negotiate in good faith. If you feel that the lessee is not acting in good faith, you may have to halt the negotiations in the case of a new line or possibly file a legal action compelling them to negotiate in good faith for an existing line or a renewal. There is no adverse possession on Indian land held in trust by the federal government. Just because the utility company has lines on the reservation without a right-of-way does not mean those lines are grandfathered in, nor that they have a right to that easement through adverse possession.
Number four – on an existing line, keep in mind the cost of the lessee removing the line if you can't reach an agreement. The reality is, sometimes, if you can't reach an agreement, you may require them to pick up the line and move it. The cost can exceed $300,000.00 a mile for a large line to moved off of the reservation and then, that same line routed around the reservation – which adds extreme costs to a project for that utility company. So, it's something to keep in mind that you can always say, "No, and you need to move your line off the reservation." Keep in your back pocket formal condemnation proceedings – we refer to as "Smash and grab".
Make sure the tribe has a good trespass code. If everything breaks down and the wheels come off the negotiations, you can file formal condemnation proceedings in your tribal court. But you have to make sure that you have a good trespass code. You will be asking the court to fine them in trespass and that you have the right to take that line as compensation. Finally, everything is negotiable.
Think outside the box and beyond the price tag, beyond just the monetary returns for the right-of-way. Next slide.
Non-monetary consideration for WAPA – or the Western Area Power Authority Administration – 50-year right-of-way agreement that was signed by Rosebud and WAPA. This agreement had a considerable price tag to it that WAPA paid, but, in addition to that, I believe it's actually a greater value to the Tribe. They agreed to pay for our membership in the Southwest Power Pool and to provide technical assistance in the form of training to buy and sell wholesale electricity. They agreed to a two-year audit of the Rosebud Sioux Tribe bill credit program. Because, at this time, we don't have an electricity utility company, the infringement of the dams on the Missouri River – the Rosebud Sioux Tribe is allocated six megawatts a year of electrical power.
If we had our electric company up and operational, that six megawatts would come directly to the Tribe. But since we don't, it actually is applied on a bill crediting program for the benefit of all of our Tribal members, giving a discount to each Tribal member that has signed up for that. The problem that we've had was – in the bill credit program – is that that six megawatts goes in at the top, is trickled down through three different electric utility companies, and comes out at the bottom as a discount on our Tribal members' utility bills. We had no accountability from any of the utility companies as to what administrative fees were being taken out, what percentage of that six megawatts equivalent was actually being applied to our Tribal members bills. So, as part of our negotiations, WAPA agreed to a two-year audit of that bill credit program to actually ensure that when six megawatts went in, six megawatts of value came out with our Tribal members.
They also agreed to the assistance in establishing Rosebud Energy Services company, a tribal owned and operated electric utility, which, I'm proud to say, the bylaws and business plans are all in front of our governmental affairs committee and being reviewed, and we're hoping for approval of that plan by the end of the year – establishing that energy services company for the Tribe. And finally, technical advice and support to the Tribe in areas such as initial transmission studies, marketing studies, training, identifying potential customers, assistance with requests for proposals to acquire energy or proposals for renewal power projects, and similar areas of assistance. Next slide.
This is the contact information. Should you have any follow-ups, the Rosebud Sioux Tribe Utility Commission – the address – physical address, P.O. Box, and also, the phone, fax, and e-mail for our office. I'd like to thank everyone for their attention in this matter. Thank you.
James Jensen: Thank you, Dan. Excellent presentation. A lot of interesting stuff there and a lot of good experience of yours personally. So, audience, please think up some questions for Dan to take advantage of that. We'll ask them at the end here.
Next, we have Breann. Breann, it looks like your slides are up, so, please, proceed.
Breann Nu'uhiwa: All right. Well, thank you, everyone. That was a phenomenal experience for me to be listening to Dan's presentation. And it was really great because we, at Pechanga Tribal Government, have, for many years, been in that exact same position in terms of negotiating with large utility companies and trying to govern and regulate their access to the land here on the reservation, trying to regulate their activities here to make sure that they're not infringing upon the Tribe sovereignty, upon its protection of cultural and environmental resources. And then, all of a sudden, two years ago, we found ourselves on the opposite side of our own table.
So, we formed a Tribal Electric Utility. It sounds like, Dan, you all are doing the same thing over there. It was a long, winding, and challenging road, but we're happy to report that we were able to successfully do that, becoming the first tribally owned and operated wholesale electric utility in the state of California, which is a very interesting state to be in the energy business. [Laughs] So, we, as the first, had many conversations with the investor-owned utilities in this area, with the state government and its various bodies that regulate and support the energy industry here. It was a very exciting experience.
It was a privilege for me to be a part of it and we learned so many valuable lessons along the way. Really got to see some of these issues from the other side and that – the point of my presentation this morning – to share that perspective, to share the lessons learned the hard way, and hopefully, for folks who are just beginning that journey, there will be some value in our experience and the case study that I'm about to present. So, if we can go to the first substantive slide.
Utility profile. So, this is a description of our electric utility. We are a traditional wholesale electric utility. We purchase power on the market, and we distribute it on the reservation. We don't currently export any power.
We don't feed into the grid at all. We purchase power or generate it ourselves and distribute it exclusively on the Pechanga Indian Reservation. The current load that we serve is approximately 18 megawatts between our commercial and government operations. Our power sources, at the moment, are 4.6 megawatts of self-generated power from our cogeneration plants that we have on site at our casino resort facility. We have 5.65 megawatts of federal hydropower.
So, Dan talked a little bit about their arrangement and their allocation of the six megawatts and their benefit crediting arrangement – their bill crediting arrangement – with the various utilities. We had a very similar arrangement for two megawatts from the Parker and Davis Dam several years ago and the renewal of that contract is actually what really sparked the conversation here and had people speaking in earnest about forming our own tribal utility so we could take direct advantage of our allocation from the Parker and Davis Dam. And there was also an opportunity to receive a direct allocation from the Boulder Canyon Project from the Hoover Dam. So, that is really what got our conversation going, got people excited about forming a tribal utility, to see if we could take advantage of our own power, have it delivered, and use it directly on the reservation. That was the main goal.
We're really proud and pleased to report that in addition to now receiving our own allocations directly and feeding that power to our reservation, we also are benefit crediting partners with other tribes who do not have their own tribal utilities and who might otherwise have not been able to take advantage of their allocation from WAPA. So, we have benefit crediting partners that we work with and we give them a portion of our revenue off of the power, and they use that to offset the costs of their government operations or their delivery of power to their reservation. And it's a really exciting and, like I said, it's a really exciting opportunity, and also, really a point of pride for our utility that we were able not only to take direct advantage of our own power, but to provide opportunities for other tribes who are still in the process of evaluating whether they themselves want to have utilities or who really don't have the resources to form their own utility, but should be able to protect their right to that allocation and to receive some sort of benefit from it. So, that's been a really great relationship. We're coming on two years of those relationships and have really found great business partners in the other tribes that we're working with there.
The remaining power need on our reservation is met by scheduling power with a scheduling coordinator and buying it out on the wholesale market, although we have a goal – I'm gonna call it a very long-term goal – of being entirely self-sufficient and being able to island the microgrid here. You may be aware that California has some very significant challenges with electric service, including issues with major fires. And so, we want to make sure that in case of an emergency, we're able to continue providing service and we may even be a place where others can come in the event that service is shut off to different places in our neighboring communities. So, we have a long-term plan. The microgrid coordinator at the University of California, San Diego called it "Stringing pearls on a necklace".
So, we're putting one pearl on that necklace at a time and the pearl that we're currently working on is one-megawatt rooftop solar project that's under construction at our resort and could possibly actually, as of a few weeks ago, be expanded to be an over two-megawatt project, including some other rooftops that were recently identified. And we're looking at electric work vehicles. Our utility general manager is out today, in fact, looking at potential opportunities to fully electrify our large service vehicles at our resort, including our buses and shuttles. So, we're looking at that as well as exploring potential vehicle to grid technology to use those large vehicles as potential back-up power sources in the event of an emergency, or to help assist with peaking when we have our demands go up after the solar comes offline. So, these are all things that we're working on hoping to add to our microgrid to improve our reliability, the reliability of our electric service, and also, our resilience against potential incidents and blackouts and shutoffs that are becoming more common as we experience different weather patterns here and find ourselves to more susceptible to fire issues.
And we do all of this and it's pursuant to a wholesale distribution access tariff agreement with Southern California Edison, who is the investor-owned utility – that serves our general area. Okay. Next slide.
This is a profile of the reservation itself. I know all reservations are different and have their own unique challenges. We have approximately 7.5 contiguous acres in Southern California. We have a mix of customers that we serve as the electric utility here on the reservation. We serve our large commercial facilities – the resort and casino being the main one – which are located on tribal trust land that's owned by the government and the band.
We also serve small commercial facilities that are on tribal trust land. We have a mix of tribally owned businesses and we have non-tribal retailers that also operate on the reservation and they're customers of our tribal electric utility as well. We serve all of the government buildings that are also on tribal trust land, but where all of the excitement comes is actually, we serve just a small handful of the residences on the reservation. There are over 300 residences on the reservation. We have an allotted reservation, so, they're individual allotment interest holders that have the land rights to those allotments, and those residences are located there.
It was not our intention, when we first started the utility, to become a residential electric service provider. We were just going to provide service to our large loads – our resort and casino, our government center – including our first responders, fire department, police, et cetera. But we found out as we were going through the process that there were about 20 residences that were attached to the government – main government service line – and so, we brought them on as kind of a beta test, and it's been very interesting to deal specifically with the issues that come along with the allotment and the rights-of-way, and that's really where our deep dive into land rights and land issues really came – especially because most of those allotments have fractionated interests. And so, we're dealing with multiple allotment interest holders that may not all have the same intent. Some of them may not even live on the property, have any real connection to it, and then, there are folks who are present on the property.
And there's oral history as to how they arrived there, but not much in the way of documentation. So, that has all been very interesting and very challenging, and that's really – despite the fact that our main customers are those large buildings and large enterprises, our real legal work – for me, in the legal department – has come in dealing with our residential customers. Next slide, please.
So, we – the Tribal Electric Utility was formed by general membership resolution as a department of the tribal government and that is relevant for purposes of discussing the land issues and rights-of-way, because we technically are the government. We're an office. We're not a separate corporate entity. We're not a separate legal entity with a distinct identity. We are simply a department of the tribal government.
And so, when we're talking about putting electric service infrastructure on land that's owned by the tribe and managed by the tribal government, we're really talking about negotiating with ourselves to put things on land that we own. So, that has really made the heavy lift of our utility formation much cleaner from a regulatory standpoint. Like I said – all of the issues we have – or had when we were first beginning – really came from the allotment piece. And then, our funding for the startup of our utility initially came from our government operations budget, but we did get federal grant funding to do a feasibility study. We had tremendous support from WAPA there helping us to crunch data and determine whether it makes sense for us to move forward with an electric utility, and we now, of course, charge rates to our customers.
We have rates for service and so, we collect payment for providing electric service from all of our customers – including ourselves – from the government. We collect from the resort and casino, which is a distinct legal and corporate entity, and then, we have a tribal state gaming compact with the state of California that earmarks certain casino revenue to be used for community betterment. And one of the specific categories within our compact for community betterment is the transition to renewal energy and clean energy. And so, that's been an additional source of funding for us as we look towards building our microgrid with clean energy, with solar, with electric vehicle, et cetera. So, that has been a really fantastic resource to also have at our disposal to try to move forward to gain more energy independence and increase our resiliency and reliability. Next slide, please.
Jurisdictionally, the way that we operate within the state – and, like I said, we're the first entity of this kind in the state of California, so, this name was invented and created between the state government and our team and the various state agencies that work with different energy industry entities. So, they deemed us – we've deemed ourselves – as a collective group – a small non-jurisdictional load-serving entity, which is kind of a combination of a bunch of different classifications that have meaning to the folks who work in this area in California. So, we are not required to register with the North American Reliability Corporation/Western Electricity Coordinating Council. So, that's the small part. We're outside the jurisdiction of the state's public utilities commission – that's the non-jurisdictional part.
As Dan was describing, tribes often have their own regulatory bodies. For us, because we're the only real utility that is actively operating on the reservation at the moment that the tribe seeks to regulate, our tribal council serves as the regulatory body. They approve and implement all of our rules and regulations governing all aspects of our electric service. We are registered with the states independent system operator – with the CALISO – for research adequacy and congestion revenue rights purposes. So, we work with them very closely.
They're actually a great partner in our utility project and they've provided excellent guidance to us as to how to move forward in this state. And we also are voluntarily working with the state's energy commission regarding resource adequacy to make sure that we're proving – or we have the resources to back up our system in case of an emergency and to potentially support others. So, that's something that we felt was important from a business operation standpoint. And so, we voluntarily adopted their standards and are following those. Next slide.
As I mentioned, our regulatory body is our Tribal Council, and the areas that they regulate that have been of importance to us in forming our tribal utility are our condemnation procedures, service standards, safety requirements – including fire safety. They take all of our rate cases – just as Dan's commission does – for the utilities that operate on their reservation and they set our renewal mandates. As you may be aware, California has a very aggressive renewal mandate and our council is currently considering – with input and advice from our staff and our outside consultants – what renewable mandates are appropriate for the reservation and our operation. So, those are the areas that they currently regulate in and I'll talk a little bit more specifically about condemnation procedures as we move into specific land issues that we encountered during our process. Next slide, please.
So, Dan gave an excellent overview and description of the rights-of-way process and it was a very interesting process for us because the rights-of-way, for the most part for us in the area where we needed to explore them, were already in existence. So, luckily, we didn't have that initial hurdle that Dan described where the infrastructure's there and the poles and wires are there, but nobody knows under what authority or what grant of authority. There were, in fact, rights-of-way document, but I do want to echo Dan's advice about documentation and seeking it out. We knew rights-of-way existed, but it was quite a process to try to actually obtain copies of them. We got what we could from the federal government.
We thought that the electric utility that the previous electric provider would have had these things in some very well-organized file somewhere, but that turned out to not exactly be the case and so, we really had to work hand in hand with the previous utility to try to piece together, from our collective records, what the rights-of-way were. And we were ultimately, thankfully, able to do that. But Dan's point is very well taken – that years ago, this was not a main priority for anyone, which is why, when we asked the question, "Can you send us over the rights-of-way that apply to these particular poles and wires?" it really required some deep digging and extra research by the utility, because, at the time that those wires and poles were placed where they are, the documentation was not necessarily the main priority. The main priority was just getting electric service to these rural areas that didn't have their basic service needs met.
And so, it was really function over form and that was something that was a challenge, because, at this point, the documentation is so critical for so much of what the utilities need and want to do. So, that was a process that did take some time, and so, that was – if folks are beginning the road towards potentially forming a utility or some other project that's gonna require the review or documentation of rights-of-way, my advice would be to give yourself some time to make sure that all of that paperwork is in order, 'cause it may be more difficult to obtain than you think. So, there were rights-of-way. One of the things that I found very interesting and maybe one step further from Dan's conversation – beyond there potentially not being rights-of-way, there was an interesting issue that came to the floor for us where there were rights-of-way, but the documentation about the legal right of the individuals who granted the rights-of-way to grant those rights-of-way was not well documented. And very similar to the situation where utilities were really just trying to get power to these homes and get power to these individuals, the tribe has not always functioned in a heavily documented, very paper-heavy system in terms of where people live.
There's so much community history and oral history and understanding there, and in some instances, it's just everyone knows that that's where that person lives, and everyone understands that, and it's always been that way. No one had any cause to question it and no one cares to question it now. Everyone's happy with the arrangement. But the documentation necessary to demonstrate the right to be present there – having a lease or some other formal document that evidences the right of that person to be in residence in that spot – has not been a priority tribally because the tribe is small and the reservation is small and everyone knows everyone and so, it wasn't a problem. But that became an issue just for process sake when we're looking at the rights-of-way and the validity of them, and whether new service line agreements or other arrangements could be made by those same individuals, and does the fact that they had a previous right-of-way authorize them to act in that capacity now without the same level of documentation that's currently required? So, that was a really interesting legal issue that we encountered that we weren't really expecting to see.
So, I put up here the main regulatory sections that were relevant to us in our process about assignment of rights-of-ways. So, like I said, the rights-of-way were already there, so, we were in a slightly different position looking at a much more nuanced obscure portion of the new regulations as to how those rights-of-ways could be properly assigned. And the portion that was ultimately relevant to us, from a legal standpoint, was section C, where it notes that assignments that are the result of a corporate merger, acquisition, or transfer by operation of law are excluded from these requirements, except for the requirement to provide a copy of that assignment and supporting documentation for reporting to the BIA. So, that's the portion that was relevant to us based on the way our utility was formed and the way we acquired the existing utility infrastructure from the predecessor utility. So, those are the filing requirements that ultimately ended up applying to us and that we were following. Next slide, please.
So, with the rights-of-ways all in place, we thought we were in good shape but, of course, people never stay stagnant, and so, we've had multiple requests. Even though we only have 25 residential customers, we've had multiple requests, since we went into business, for new construction. I think we've had, I want to say, five – just, like I said, 25 customers, and we've already had, in the past 2 years, 5 requests for new bills. And so, the portion of the regulations that is applicable to that activity that we're currently engaged in is the portion that addresses service line agreements. And service lines are those smaller lines that branch off of the bigger electric lines that require a right-of-way and provide the lower voltage service directly to the homes.
And so, that's something that we've been working on and, again, that's been interesting – going back to my earlier point about land rights and leases and people have some sort of documentary evidence of their right to be present, be a resident of an area, and to authorize the provision of electric service to that resident. And so, that's something that we've been working with folks on. Sometimes, they come to us and they have all of the necessary authority to obtain a lease; they just don't have one. And so, we work with them to first, obtain the lease so that we can then go through the service line agreement process with them and have everything registered properly. And so, the specific requirement that we are most conscious of when we get a request for new service from one of our reservation customers is that we – when it's a Tribal customer that we have a service line agreement in place that we file – so, even if we're negotiating with ourselves, we still file a service line agreement for that.
And then, if we're gonna be doing any kind of construction work across individually allotted land, that we and the owners – or legally authorized occupants – so, in this case, a lessee that has an actual lease in hand – then, we execute a service line agreement with them as well before any construction is allowed to begin. Next slide, please.
And so, that's what we're doing now. That's our day to day bread and butter. We're doing service line agreements. We have the rights-of-ways. We're not currently undertaking any projects that would require us to obtain new rights-of-way, though that's never off the table.
Like I mentioned, we have 300 plus residences here on the reservation. We currently only provide low-cost, locally sourced powers to 25 of them, so, you can imagine the other 275 are probably wondering when they're going to be seeing that kind of a dip in their electric cost. So, there may be much more action for us, potentially, on rights-of-ways issues in the future, but it's not something that we're currently planning to do or are moving toward with any deliberate speed. So, that – the rights-of-ways issue is not at the forefront at the moment, but what is is talking about potential large-scale solar development and looking at what kinds of opportunities are there. And so, it was fortuitous that James asked if I'd be interested in talking about wind and solar leasing, because it's something that we've been really meaning to look into more specifically while we're envisioning our microgrid project and how we're gonna fill the gap between what we already produce on reservation and what we're buying on the wholesale market.
And we have been having very serious discussions about solar development, and if we were to move in that direction, what our requirements might be and even potentially having an outside company come in under some agreement and provide that resource for us under some sort of leasing, or if we wanted to do it on the reservation on land that we don't have the legal right to unilaterally use for that purpose. And the big debate that's currently – or the big question that folks are usually asking when they're looking at this particular area – is whether to proceed under the expedited wind and solar leasing provisions or whether to move toward a HEARTH Act approach. And we, at Pechanga, do, in fact have HEARTH Act regulations but not in this particular area. We do issue our own business leases and so, we have our processes and regulatory framework for that type of activity, but we don't issue, right now, residential leases or agricultural leases or any other types of leases, and so, it's something that we've thought about very carefully and we've weighed and evaluated, and it is a very big list.
So, actually, I'll go to the next slide. I'm speaking backwards, but I think it flows with the thought process. So – no. You can go back to the next one. Yes.
And so, in determining whether – the HEARTH Act can be a much more expedited process and really help the tribe to retain its sovereignty in the area of determining the land right issues, the control of lease terms. I mean, certainly, there need to be regulations in place that need to be approved, and so, there isn't unfettered latitude as far as designing your framework, but you definitely are able to really make your regulations relevant and appropriate, and have your process be relevant and appropriate for your particular reservation, what you're trying to accomplish there, and the resources that you have to administer the program and adjust the time lines appropriately to make sure that things are being done in the most efficient and expeditious way. And so, there is a tremendous benefit to that process. It helps to develop that talent and ability internally, so, it's a great nation-building aspect when you are working in that area. You typically – we have an environmental department here and so, they perform the environmental reviews that are necessary when we're exercising our authority under the HEARTH Act.
And so, that can be a real benefit in these areas. However, it really is something that requires some personnel infrastructure and process infrastructure, and our legal department is often called upon to build regulatory and administrative framework that correspond with laws and authority when the tribe has chosen to exercise sovereign authority that it has the right to exercise. And we always ask that very big question, you know? "Are we ready to take this on? Because we have the right to take it on."
It's an exciting and phenomenal process, but it certainly can be administratively burdensome and a large burden on the tribal government's resources in terms of personnel. So, that's something to consider, but if that's an option and the resources are there, HEART Act regulations in this area can be a great exercise of tribal sovereignty and self-governance and advancement of tribal interests in a very tangible way. The other option is the option that's always been in place but it looks better now – which is the part 162 process. And we can go backwards one slide and that's the process that's been in place, but has really been refined, in recent times, to be more efficient and more expeditious.
The process now has the BIA really deferring to the tribe's determination regarding its own economic best interests, which makes a tremendous amount of sense. There are stricter timelines on BIA review, but it is, from a paperwork standpoint, still very rigorous. So, you have a resource development plan that needs to be reviewed and approved. There's corporate qualifications that need to be proven, and then, there's an external, of course, environmental review process through the NEPA process. So, unlike what we would do here in with our business leasing HEARTH Act authority, we wouldn't be using our tribal environmental department.
We'd have to go externally for that environmental review, which can add its own challenges to your process and potentially extend the period of time to get everything squared away to move forward. But it's there. It's much more efficient than it had been previously, and so, it's something that is definitely a viable option if the HEARTH Act authority is not something the tribe is either prepared to exercise or really interested in exercising, given the internal burden on resources. So, that's everything we're doing and looking at and thinking of and it's, like I said, really exciting for me. I sat here genuinely enthralled by Dan's conversation and thought to myself for a second, "Boy, I've become really nerdy" [Laughs] because I can't get enough of these issues.
And we're looking at more of them and we are excited to be working on future rights-of-ways issues, future service line agreement projects, and potential long-scale leasing questions either under the HEARTH Act, if we choose to go in that direction, or under part 162. So, I appreciate your time and look forward to any questions you may have. Thank you.
James Jensen: Thank you, Breann. Excellent presentation as well. A lot of [Break in audio] stuff you guys are working on, and that sounds like you're gonna be kept very busy with the different nuances from a legal standpoint.
With that, we are ready for questions for Dan and Breann. We have a couple, but please do. We have plenty of time. So, if you're interested to take advantage of the expertise we have here, please, do submit the questions and I'll direct them to our panel. So, first off – and I'm gonna paraphrase this question – but for Dan.
The utility commission has exercised their authority and impacted rate making on the reservation it sounds like, to some degree. Has the utility authority also impacted, say, utility policies such as net metering or the like? Or have you heard of other tribes that are exercising their authority to impact those sorts of utility policies for renewables?
Dan Gargan: Thank you, James, and thank you to the person asking the questions. Yes. A tribal utility commission at Rosebud just recently enacted a net metering code. We are currently working on drafting a virtual net metering code, and that's going – I think gonna be even more critical to the work we're doing. The Rosebud Reservation is nearly 2,500 square miles and there are 20 communities that are the structure of our government on the reservation.
One of the goals is to provide solar arrays for each of these communities to help supplement the subsidized utility bills for each of those community members. To do that, we need to have a virtual net metering code in place where the solar array itself can be metered and then, that power than allocated – or the energy, the value associated with that production – be applied to the bills for the individual tribal members or community members. Net metering, as probably everyone knows, is established so if you have rooftop solar, if you have a small wind turbine, it's generally behind the meter, and then you're given – at your home – and then, you're given credit for the amount of production of energy with those types of units. This would be an incidence in virtual net metering where nobody is actually connected to the solar wind array and it's individually metered, and then, the value is allocated within the accounting system or computer system by the electric utility itself. So, we also just recently passed a residential disconnect code that limits the time when electric utility companies operating on the reservation can disconnect people from their power at times of extreme heat or extreme cold, or, if we have elders in homes that have medical equipment that will require electricity – things like that – it puts some boundaries on termination of service on electric utility on the reservation. So, those are two examples of codes that we just recently passed.
James Jensen: Excellent. Thanks Dan. And that's exciting stuff. That virtual net metering is kind of a Holy Grail for some institutes that are interested in pursuing particularly solar and wind projects.
Question for Breann here. You talked about how Pechanga Western Electric was working with other tribes on their federal hydropower allocation. Is that available to other tribes or are you guys working with kind of everyone that that arrangement might be applicable with? Breann, did you hear that question? You might be muted.
Breann Nu'uhiwa: Can you hear me?
James Jensen: Yes. Okay. Great. So, we actually are open to having as many benefit crediting partners as we can accommodate in terms of our actual need for the electricity. So, like I mentioned, we're at 5.6 megawatts right now in our direct allocation, combined with our benefit crediting partner's allocation, and then, we have our – approximately four, going on five megawatts that we produce ourselves.
So, the remainder of our 18-megawatt load we buy on the wholesale market, and so, we would love to have more benefit crediting partners to decrease the amount that we're relying on the wholesale market. So, my contact information is up there, and I'd be happy to hear from anyone who's interested. We – of course – so, we are part of the Boulder Canyon Project and the Parker Davis Project and so, those are the allocations that we're looking at and we have looked at as far as assisting other tribes without utilities to get the best possible return for their allocation. And I know there are folks who work and have bill crediting arrangements with their investor-owned utilities or their district that they work with where they're receiving a portion off of their bill. The way that our program is structured is we actually just issue a check to our benefit crediting partners pursuant to our agreement.
So, we're happy and it's really a fantastic project and one of the ones that we're most proud and excited about, because we – with our – one of our benefit crediting partners is actually in the process of forming their own utility, and we've been able to provide them with advice and guidance and share our experiences with them. And so, it's been a really fruitful relationship and, of course, we'll be sad to see them go, but really happy to see them take direct advantage of their own allocation and would love to help others do the same.
James Jensen: Great. Thanks, Breann. Another question for you – and maybe an opportunity for you to geek out a little bit. "I have a question concerning service line agreements" it says. "The regs indicate that service line agreements generally branch off from facilities built under a regulatory agreement. Practically speaking, however, new service line agreements often branch off of facilities built under another service line agreement, and the next will branch off of that last one. Can you confirm that this is in compliance?"
Breann Nu'uhiwa: Well, I can't give anyone direct legal advice without a contract, [Laughs] but I can say – if it were me and our utility were to come to me with that question, we're looking mostly at whether that particular type of line is below the threshold where you would need a right-of-way and is branching off of an appropriately authorized other line. So, I'm – to use a legal term, "Is it fruit of the poisonous tree or not, right?" So, do you have the appropriate right-of-way and then, are all of the branches that you're branching off of appropriately documented and placed with the appropriate authority – and I think the answer to that is, "Yes" – then, I would personally feel pretty confident that our record keeping and our approach was appropriate under the regs.
James Jensen: Great. Thank you. A question for Dan here. Has the tribal energy commission been approached by high voltage transmission developers interested in exporting wind energy developed on the reservation? If so, how did you or might you handle that?
Dan Gargan: Well, one of the things that we're doing at Rosebud is we actually are members of – the correct pronunciation is Oceti Sakowin Power Authority, which is the seven council fires of the Lakota Nation have gotten together to create an inner tribal consortium for utility scale wind development. And we're looking at that as a priority. We actually have sites going in at Cheyenne River and at Oglala that we're working on power purchase agreements and financing for. We have identified a site that may be a good potential for Rosebud. Beyond that, we've not really been approached by large commercial developers, and we – for a while.
There were a couple in the past. Generally, they were agreements that were not favorable to the tribe. I think there was a term coined some time ago called "The Minnesota Flip" where the company would come in, they would put in all the turbines, they would cover all the financing, the tribe would get a small return – it would tie up the land for a minimum of 20 years, and at the end of the agreement, the tribe would take possession of the towers and the turbines. The problem is is generally, at that point, there's been little or no maintenance, and so, the deferred maintenance makes the turbines and the equipment itself marginal in value at best. And so, the tribe has not really pursued that. We're looking more towards the OSPA inner tribal utility scale development.
James Jensen: Thanks, Dan, and thanks for correcting my previous pronunciation.
[Crosstalk]
Dan Gargan: Sure. They're a couple hard words to pronounce.
James Jensen: Yeah. And even with your advice, I probably wouldn't have gotten it right. So, I'm glad you're able to tell the audience what it should sound like. Another question for you – how many utilities are on Rosebud's reservation? I guess we're talking electric utilities.
And then, how did you bring them to the table to discuss creating your own tribal utility?
Dan Gargan: There are two utility companies – Cherry Todd Electric – a rural electric co-oping – the main one that serves the reservation. There's Lacreek Electric that serves the western edge of the reservation, and then, Rosebud Electric actually serves the eastern end, but it's not within the current contiguous boundaries of the reservation because of the old Rosebud versus Kneip lawsuit, we have communities out there of Ideal, Hamill, Bonesteel, and a small one in Winner, where Rosebud Electric serves those communities, but right now, they're not within the legal exterior boundaries of the reservation. Arguably, some people are still holding out that we still have that authority. We brought Cherry Todd Electric Rural Electric Cooperative to the table through a lawsuit. We actually sued them in tribal court for voter discrimination and a number of other aspects and parts of a multi complaint that we filed back, I believe, in 2013, and we're still negotiating.
There are – one of the things that the tribal course has ruled, at this point, is that the tribe does have jurisdiction under both prongs of the Montana test, which was very critical with the work that we were doing to show that under that test, that there was a consensual relationship between Cherry Todd electric and tribal members as customers, and then, also, that the jurisdiction over Cherry Todd was an integral component of the governance by the tribe on the reservation. So, that actually took a lawsuit to bring them to the table to work with us. And I think we're getting close on that. We hope to settle it in a positive manner. One of the problems that we've had that's ongoing – and I've talked to a number of different people about this – is Cherry Todd has an all requirements contract with Rushmore Electric who has an all requirements contract with Basin Electric.
All of those are cooperatives, non-profits, but it requires Cherry Todd to buy all of their power from Rushmore Electric. Rushmore's required to buy all their power from Basin Electric. And so, it's been very difficult breaking into that market, even under PURPA and some of the FERC regulations to be able to set up, for example, the solar arrays in a community and to provide the power and have that credited back to our tribal members. It's been a fight every step of the way, and in big part, because of the all requirements contract that these companies have with each other. Hopefully, we can do something about that, get around it, interject ourselves in it. We're working on that now.
James Jensen: Thanks, Dan. I've got one more question here. So, I guess audience, submit a couple of more if you have any. Otherwise, we'll end early, which is perfectly fine. But this one is for Breann talking about service line agreements.
Have you heard of any tribe or yourselves use service lines agreement to connect solar to the grid? Obviously, if it's under the voltage threshold that the service line's applied to.
Breann Nu'uhiwa: We have not personally done that. We – like I mentioned, our current sample size of residential customers is pretty small, but it is something that we're looking into as part of our feasibility study and our general visioning about what taking on the rest of the residences might look like. And that's something that I'd be happy to, if someone wants to contact me, talk more about, because that's a legal issue that we're currently investigating, but we have not come to any conclusions on it and I haven't really reached out to anyone to see what other folks are doing in that area yet.
James Jensen: Great. Thanks, Breann. So, with that, I don't see any more questions. I appreciate all the speakers – both the speakers' contributions to today's webinar. Wonderful presentations and a lot of good experience from both of you. We are very interested in your suggestions on how to strengthen the value of this training, so, please do send us your feedback.
Our final slide of the day is just showing the remaining webinars of the 2019 series. The next webinar, titled Tribal Energy Business Case Studies and Success Factors will be held on October 2, 2019 at 11:00 AM Mountain Time. Note that is a change from the previous schedule. It's been moved back one week – or later one week, I should say – to October 2nd. So, the first Wednesday of the month rather than the last Wednesday of September for those that attend regularly. You'll notice that difference.
Thank you again for your interest and attendance today. We look forward to you joining us on future webinars and this concludes our webinar for today. Good day.
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